An interesting and dismaying thing is happening: more and more, the courts are ruling in favor of the alleged insider traders. A little over a year ago, the Second Circuit of Appeals, which oversees New York, Connecticut and Vermont, quite possibly the land of moneyed men, sided with two hedge fund traders and overturned a lower court ruling on inside trading. The New York Times report, James Stewart, said that this ruling has set back the insider trading prosecutions and quite possibly could lead to more “insider trading”, although the courts would not regard them as so (but the common person on the street would). Government lawyers and hedge fund officials fear that this confusion is allowing hedge funds and trader to trade confidential information with impunity.
To read the article, click here.
Now, I did some investigations, just out of curiosity, on where the Second Circuit is located and who comprises the court. As I mentioned earlier, the court oversees New York, Connecticut and Vermont. The make up of the court looks like it is has a greater preponderance toward Democratic leanings, or maybe I should say were “installed” by Democratic presidents. I’m counting the active judges and not including the senior judges because they are supposedly retired. There are 13 active judges and 9 senior judges (retired?). Out of the 13, 8 were nominated by a Democratic president. So it is interesting that the Democratic party, supposedly against deregulation and unbridled free market, are installing judges that side with the traders/hedge funds/other financial types. This leaning toward siding with the insiders could be more a function of living in New York, and thus being heavily influenced by the thinking of Wall Street, than of party philosophy.
Whatever the cause may be, this is not good.
Currently, a case stands before the Supreme Court. But, with one of the justices dead, I wouldn’t hold my breath on any resolutions soon. Of course, the Supreme Court may eventually side with the insiders too and that would mean the wealthy gets even more wealthier. Is anyone still wondering why the American people are clamoring for change and nominating the likes of Trump, Cruz or Sanders?